Dutch Chemicals Need to Increase Innovation to Stay Competitive

The $95 billion Dutch chemical industry, inventor of Dyneema plastic used in carparts and body armor, needs to increase annual investment in innovation to 1 billion euros ($1.3 billion) to cope with global competition, according to industry organization VNCI.

“If we don’t do something the chemical industry will deteriorate and shrink, and eventually disappear from Europe,” Colette Alma, director of industry organization VNCI told journalists at a briefing yesterday.

The Dutch chemical industry, which spent 611 million euros on developing new products in 2012, is Europe’s third-largest behind France and Germany. Across the region, chemical producers have been shifting production outside of Europe, though research and development still takes place locally, Alma said.

Royal DSM NV, the maker of Dyneema, and Akzo Nobel NV, which developed a fully compostable and recyclable paper cup, are prominent in the Netherlands’ chemical landscape. The port of Rotterdam sports a chemical cluster with Shin-Etsu Chemical Co. and industrial gas maker Air Liquide SA on site.

VNCI is pushing for decreased government regulation, easing the provision of permits, stimulating cooperation and updating infrastructure, such as pipelines, Alma said. Greater cooperation is needed between large and small companies, which are often more innovative and can adapt faster to new market developments. Large companies can step in with capital and facilities when start-ups get to the point when their operations needs scaling up.

To support innovation by smaller companies, the government needs to increase its fund for innovation by small and medium enterprises to about 100 million euros from the current 32 million euros, Bert Jan Lommerts of industry organization Topteam Chemics for SMEs, said Tuesday.

“We need to think big, but start small,” he added.

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